Royal Bank Of Scotland Branch Sale Collapses, Jobs Under Threat

13/10/2012 18:50

PA/Huffington Post UK

Thousands of workers are facing mounting uncertainty over their jobs after the collapse of a proposed sale of Royal Bank of Scotland branches to Spanish banking giant Santander, it was warned on Saturday.

Unite called on the government to press the European Commission to lift its requirement for RBS to sell 316 branches and other assets.

Hester has promised no disruption to customers

The UK state-owned bank had planned to sell the assets, which also included 40 banking centres for small and medium-sized businesses, in a deal approved by the EC.

But Santander has pulled out of the £1.65bn deal, sparking fresh job fears.

Gail Cartmail, Unite's assistant general secretary, said: "This latest development is causing yet more uncertainty and represents another day of chaos for loyal RBS staff.

"We would urge the government to press the European Commission to drop its insistence that the branches should be sold.

"The real danger is that the European Commission's requirement to sell branches and assets by the end of 2013 will result in a fire sale and an attempt by any buyer to strip out costs and drive down terms and conditions of hard working staff.

"At the very least the commission should give RBS more time to ensure that a buyer is found which is good for the taxpayer and the economy, right for competition and above all right for staff, their terms and conditions, job security and future."

RBS Group chief executive Stephen Hester promised there would be "no disruption" for customers and said the taxpayer-backed bank would begin a process to seek a new buyer.

Hester said: "I can assure all affected customers that there will be no disruption to the service they receive. It is business as usual in all of these branches, and customers don't need to take any action.

"While this is a profitable part of our business that we would rather not part with, RBS has worked hard to ensure it is substantially separate from our UK branch network and corporate business and largely ready to be taken on by a new owner.

"Much of the heavy lifting associated with a transfer has already been completed, including separating data for 1.8 million customers and putting in place a stand-alone management team.

"It is of course disappointing that Santander decided to pull out of this transaction, especially for the customers and staff involved.

"However, RBS's strong progress in our restructuring plans means we can continue to provide a stable home for this business and its customers pending a further resolution.

"RBS will commence a new process of disposal and will provide a further update on this in due course."

Santander agreed in August 2010 to buy the assets, broadly comprising the RBS branch business in England and Wales, the NatWest branch business in Scotland and certain other business activities across the UK.

But on Friday night it said it had pulled out of the deal after it became apparent that a revised target for the purchase to be completed by the end of the year would not be achieved.

The Spanish bank said the sale was originally scheduled to be completed in 2011 but this was extended to the end of 2012.

Santander UK chief executive Ana Botin said: "Our guiding principle throughout this transaction has been a seamless journey for customers - which requires the business to be delivered to Santander UK by RBS in a steady state.

"We have concluded that given delays it is not possible to complete this within a reasonable timeframe."

Some commentators have suggested that finding another buyer in the current economic climate may not be easy.